Despite the trend of modernizing back office real estate processes, a surprisingly high percentage of real estate owners and operators are still using spreadsheets and paper to manage their properties. A new report out today outlines just how large the divide is between what tenants expect and how the commercial real estate industry actually operates. The report’s authors at MRI Software surveyed 219 U.S. real estate professionals from companies of various sizes. Of the respondents, 56% were in the multifamily sector, 30% in office 21% in retail and the remaining 26% in “other.”
The first finding that jumped out was the types of technologies that renters find most important. Across the board, digital services like digital payments and electronic billing and, of course, broadband internet, were seen as the most valued offerings. For commercial real estate, the other top-ranked amenities point to the power of WeWork’s business model as renters mostly wanted proximity to public transportation, flex leasing, and kitchen facilities.
In the multifamily residential market there seemed to be a bit of an age divide. Established professionals wanted features like in-unit laundry and private garages while students and millennials wanted exercise facilities and multiple options for strong cell service. Leave it to the kids to ask for the moon.
This is even more revealing when compared to the technologies that the respondents plan to adopt. Commercial real estate pros were split pretty evenly between online payments (14%), SEO (13%), and management software (13%). Their multifamily peers were planning on adopting technology for virtual tours (21%), mobile inspections (17%) and lead tracking (17%). There is obviously priority given to marketing and operating efficiency, two important parts of any property business, but it may come at the expense of user experience.
While virtual tours and accounting software might make the c-suite execs happy in the short term, it does little to provide a better service to the people that actually buy the product. This could be at least partially due to the fact that every real estate sector except for retail is experiencing historically low vacancy rates. But if this lessors market starts to shift and properties need to compete in order to stay profitable then we will hopefully see more of a priority put on user experience.
The market might be partially to blame, but the makeup of the industry certainly doesn’t help. One of the most emphasized findings in this survey was that 42% of commercial real estate companies rely on spreadsheets. This exemplifies an observation had by many: commercial real estate is stuck in its ways.
This narrative has been broadcast so many times by so many people that we try to steer away from it. Plus, after what we have seen with the rapid adoption of tech, we suspect that much of it is hyperbole. Even if we will see a more technological commercial real estate industry in the near future, studies like the one MRI just released do make it hard to argue that the technology that is being offered might not be what is being asked for by the market.